Seasonality's Comeback: Understanding Normal Home Price Appreciation

If you’re thinking of making a move, one of the biggest questions you have right now is probably: what’s happening with home prices? Despite what you may be hearing in the news, nationally, home prices aren’t falling. It’s just that price growth is beginning to normalize. Here’s the context you need to really understand that trend.

In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.

That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show typical monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

As the data shows, at the beginning of the year, home prices grow, but not as much as they do in the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.

After several unusual ‘unicorn’ years, today’s higher mortgage rates helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic, explains:

High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.”

Why This Is So Important to Understand

In the coming months, you’re going to see the media talk more about home prices. In their coverage, you’ll likely see industry terms like these:

  • Appreciation: when prices increase.
  • Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
  • Depreciation: when prices decrease.

Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear. The rapid pace of home price growth the market saw in recent years was unsustainable. It had to slow down at some point and that’s what we’re starting to see – deceleration of appreciation, not depreciation. 

Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.

Bottom Line

While the headlines are generating fear and confusion on what’s happening with home prices, the truth is simple. Home price appreciation is returning to normal seasonality. If you have questions about what’s happening with prices in our local area, let’s connect.

602 Properties
Page 1 of 51
Open 7/21
8763 Saint Kitts CIRCLE Englewood,  FL 34224
$340,000
Neighborhood: Coco Bay
3
Beds
2
Baths
1,417
Sq.Ft.
2023
Year Built
2
Days on Site
A4617244
MLS
$160,000
Neighborhood: Fiddlers Green 02 Ph 04 Bldg 18
2
Beds
2
Baths
1,092
Sq.Ft.
1988
Year Built
2
Days on Site
D6137117
MLS
$565,000
Neighborhood: Englewood Gardens
2
Beds
2
Baths
2,072
Sq.Ft.
1989
Year Built
2
Days on Site
D6137422
MLS
$265,000
Neighborhood: Peyton Place
2
Beds
1
Baths
912
Sq.Ft.
1987
Year Built
2
Days on Site
D6137302
MLS
$339,900
Neighborhood: Rock Creek Park 3Rd Add
3
Beds
2
Baths
1,323
Sq.Ft.
2024
Year Built
2
Days on Site
A4617548
MLS
$389,000
Neighborhood: Bay Vista Blvd
2
Beds
2
Baths
1,713
Sq.Ft.
1981
Year Built
2
Days on Site
N6133797
MLS
Open 7/21
6074 Hooper Ln Englewood,  FL 34224
$385,000
Neighborhood: Port Charlotte Sec 069
3
Beds
2
Baths
1,621
Sq.Ft.
2008
Year Built
3
Days on Site
D6137311
MLS
$150,000
Neighborhood: Quails Run I
1
Beds
1
Baths
572
Sq.Ft.
1977
Year Built
3
Days on Site
D6137315
MLS
$735,000
Neighborhood: Port Charlotte Sec 064
3
Beds
2
Baths
2,115
Sq.Ft.
2004
Year Built
3
Days on Site
D6137370
MLS
$405,000
Neighborhood: Englewood Isles Sub
2
Beds
2
Baths
1,295
Sq.Ft.
1989
Year Built
3
Days on Site
T3542404
MLS
$229,000
Neighborhood: Harris Subdivion 3
2
Beds
1
Baths
936
Sq.Ft.
1965
Year Built
3
Days on Site
D6137362
MLS
$750,000
Neighborhood: Boca Royale Ph 2 & 3
3
Beds
3
Baths
2,718
Sq.Ft.
2015
Year Built
3
Days on Site
D6137363
MLS

Post a Comment